The difficulty of predicting future long-term care utilization places many long-term care service organizations and elderly communities in jeopardy and prohibits the implementation of innovative programs. The correlation between utilization and physical functioning is well established in the long-term care literature. However, there is a sparsity of research that provides information on expected functional change over the life cycle. The ability to predict ADL change over time would allow communities to better assess the changing mix of residents and in turn better project their service needs and the communities' future financial liabilities. In this project we propose to study the factors that affect the probability of physical functional change using logit and multinomial logit methods. In the logit analysis, the dependent variable will be measured dichotomously as change/no change. In the multinomial logit analysis, the dependent variable will be measured trichotomously as improvement/no change/decline. We hypothesize that ADL change (including death) is a function of ADL level, mental status, age, morbidity history, prior service utilization, risk factors, and socio-economic factors. Using the probability estimates from the multivariate analyses, estimates will be made of the expected number of years a person with a given ADL level and age will remain in that level. Estimates will be presented with confidence intervals for major groups in the population. Average expenditures and average utilization on long-term care services will be presented by ADL level and ADL change/no ADL change. Results will be presented for particular services and combinations of services. The study will be based on secondary analysis of the Section 222 Day Care and Home maker Experiments, a randomized longitudinal study of 1,871 Medicare-eligible functionally dependent persons over age 65 assessed five times during 1975 and 1976 over a one-year period. The study includes information on functional dependence, hospital, and long-term care utilization. Validation of the probability estimates will be made with two independent data sets that are part of the Brown University Long Term Care Archives, the Chronic Disease Module Study (1973-1975), a study of 874 functionally dependent persons aged 45 or older in Michigan; and the Georgia Alternative Health Services Project (1976-1980), a study of 747 Medicaid-eligible elderly at risk of entering a nursing home.